Accounting 9706 · AS & A Level · Accounting for non-current assets

Accounting for non-current assets — practice question

The information below relates to the purchase of a new machine. Machine cost $80000 Less 10% trade discount $8000 Cost after discount $72000 Delivery cost $1200 Installation cost $1800 Annual maintenance cost $4000 The business intends to keep the machine for 5 years. It is predicted to be sold for $5000. What will be the annual depreciation charge using the straight-line method?

  • A$13400
  • B$14000
  • C$14800
  • D$15600

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